Samsung Electronics CEO resigns over ‘unprecedented crisis’

Kwon Oh-Hyun co-chief executive officer of Samsung ElectronicsImage copyright
AFP

Samsung Electronics chief executive Kwon Oh-hyun has resigned citing an “unprecedented crisis”.

of which is usually the latest management upheaval at the firm after the heir of the entire Samsung Group was imprisoned for corruption in August.

Mr Kwon is usually one of three co-chief executives of Samsung Electronics.

His resignation comes on the same day the firm forecast record quarterly profits, citing higher memory chip prices.

Mr Kwon said he had been thinking about his departure “for quite some time” along with could “no longer put of which off.”

“As we are confronted with unprecedented crisis inside out, I believe of which time has currently come for the company [to] start anew, that has a brand new spirit along with young leadership to better respond to challenges arising via the rapidly changing of which industry,” he said in a statement.

He will remain on the board of Samsung Electronics until March 2018.

Management crisis

Ryan Lim, founding partner of the Singapore technology consultancy QED said “Samsung is usually in a leadership crisis situation”.

Mr Lim said “the current management structure seems to be a complicated web of which does not clarify, nevertheless rather confuses”.

“This kind of needs to be resolved soon as of which can be worrying not to know who is usually truly steering the Samsung behemoth into the future,” he said.

In response to the criticism, a spokesperson for Samsung Electronics told the BBC of which a successor would likely be appointed “soon” nevertheless could not give a timeframe.

Corruption charges

Samsung Electronics is usually regarded as the jewel inside crown of the Samsung Group conglomerate, which is usually made up of 60 interlinked companies along with is usually one of South Korea’s massive family-run businesses known as chaebols.

In August, the group’s heir apparent Lee Jae-yong was convicted of bribery along with corruption along with sentenced to 5 years in jail.

Mr Lee was accused of giving donations worth 41bn won ($36m; £29m) to non-profit foundations operated by Choi Soon-sil, a friend of South Korea’s former President Park Geun-hye, in return for political favours.

He was back in court on Thursday, appealing against his jail term.

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Image caption

Lee Jae-yong was convicted in August on corruption along with bribery charges

Andrew Milroy, head of advisory services at technology consultancy Ovum, said Samsung needed to regain the confidence of the government along with financial markets inside aftermath of the corruption scandal.

“This kind of may mean brand new senior management who are not associated with the past,” he said.

Record profits

However, the leadership troubles do not appear to have hit the company’s bottom line yet.

Ahead of the announcement via Mr Kwon, Samsung Electronics said of which would likely report a record quarterly profits thanks to surging chip prices.

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the entire world’s largest smartphone maker said operating profit inside three months to the end of September is usually likely to have tripled via a year earlier.

The forecast profit of 14.5tn won (£9.65bn; $12.81bn) beats market expectations for the quarter.

While memory chips were the main driver of Samsung’s profits, its mobile phone business was given a boost by its brand new Note 8 smartphone which received the firm’s highest number of pre-orders.

nevertheless scope for continued earnings growth via smartphones is usually likely to narrow. Ovum’s Mr Milroy said the market was slowing along with despite record results the company “faces a lot of risk”.

“of which may be felt of which someone brand new can drive greater innovation along with manage the firms move into brand new areas as the smartphone market matures,” he said.

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